How Long It Takes To Improve Your Credit Score

Our credit scores have become hugely important and affect everything from our ability to open a bank account to getting a phone contract. Improving your credit score has become mainstream with free credit score checks available to all but how long does it take to actually improve your credit score?

Improving your credit score takes time and can't be done quickly. To get any visible improvement will take at least 2 months and it will take a minimum of 8 months to see any major improvements appear on your credit report.

Read on to find out exactly how long improving your credit score will take, how the timing of the process works and what you can do to make the improvement come faster.

How long does it take to improve your credit score?

Improving your credit score is a long-term process. While some initial results can be seen in 2 to 4 months time if you act right away to improve things, other factors that affect your credit score take months and in some case years to improve.

It's important to note that there is no such thing as a single Credit Score. There are 3 credit reference agencies (Experian, Equifax and TransUnion) that collect data from your credit accounts and then provide this data back to lenders for them to use in underwriting.

While these agencies or companies that use their data might show you a score, that number in itself is meaningless - the absolute majority of lenders do not actually use your credit score. They use the credit reference data to calculate their own score and use that instead.

This means that to improve the credit score that matters, you need to improve the hundreds of variables that the credit reference agencies hold against your name to maximise your chances of getting scored highly.

We have a lot more detail below about how long different variables take, but expect to take between 2 months and 3 years to improve the different ones that are provided to lenders by the reference agencies.

Your credit profile will be improving all the time so take it one little step at a time and you'll get there in the end.

Small improvements to your credit score are faster than big changes

Making small improvements to your credit score can be done much more quickly than wholesale changes to the way banks view your credit profile.

Improvements that are likely to be seen the quickest are short term factors that have a noticeable impact on your credit profile.

These are things like the number of searches on the bureau and your payment profile. If you don't apply for new credit products for a few months, you will get a bump up in your credit score. Making sure all your payments are on time and all your account balances are reducing is also a great short term sign.

Major changes in your credit score will take considerably longer. One of the best things you can do is repay and close some of your loans or credit cards but that will naturally take time.

If you've had blips on your credit record with missed payments, going over your limit or a short term increase in your outstanding debt, make sure you do all the right things for 12 months - make payments on time, stay within your credit limit and reduce your outstanding debt.

The majority of the benefit from these types of improvements will be seen within a year.

Getting a perfect credit score will take some time

Getting a great credit score - graphic drawn on a chalkboard

If your aim is to get the perfect credit score so you can qualify for the very best deals, mortgage rates or super premium credit cards, you'll need to arm yourself with a lot of patience - this process will take time.

If you've had any kind of serious blemishes on your credit profile, such as an Individual Voluntary Arrangement, bankruptcy or a credit charge off, you'll have to wait 6 years before those things clear off your credit report.

Some lenders will only look as far back as 3 years, but the premium providers will turn down those with any of these on their record.

While all data is held at the bureau for 6 years, not all factors take that long to get to a perfect state. If you've missed a payment or gone over your credit limit, you might be concerned how long it will take for these factors to stop affecting your credit profile.

The answer in most cases is around 12 months and in almost every case, going over your credit limit over 18 months ago will have no impact on your credit score.

The other reason it takes time to get a perfect credit score is that you actually have to repay debt. While having credit products is good for your credit score, if you have balances on your credit cards or outstanding loans, paying these down is necessary to get the best possible credit score.

Unless you're going to win the lottery, this is going to take some time. You'll need to pay up and close all outstanding loans, pay down your credit card balances and then continue repaying your credit cards in full. It's also a good idea to close down credit card accounts you don't actively use.

How long it takes for data to show up in your credit score

Even if you do everything right today and repay a tonne of debt, close down a few credit cards, pay down your mortgage and register on the electoral roll, you won't see any improvement to your credit score quickly.

In fact, it will take around 2 months for you to see any benefit from your actions at all.

This is all because of the way data sharing between financial services companies and the credit bureaus works.

Typically all companies that share data with the credit bureau will do so on a monthly basis where data is provided to the bureau on a fixed date.

The bureau will then have internal processes to check and upload the data that vary in the amount of time they take, but can take several days to complete the necessary checks, due diligence and data quality assurance.

The data that the credit bureau provides back to lenders is also updated on a monthly cycle. Your existing lenders will receive this data once a month. If you make a new application, they will get the latest data that is available at that time.

So let's say, for example, the banks send and receive data to the credit reference bureau on the 28th of every month. If you go ahead and clear your balance and close your account down on the 1st of the month, the credit bureau will only find out you did that a whole month later.

If you go and apply to another bank on the 15th of the following month, the data available to them may still be the version that was updated at the end of the previous month and they will therefore still not see any of the good stuff you've done.

The key is to be patient - the systems and processes used in the financial services industry can be a little on the slow side so do the right things to improve your credit profile and you will see it reflect in your scores before long.

How long do key credit score variables take to update?

When banks or other companies make a credit risk assessment, they don't get the same credit report that you will see when you sign up to the credit reference agency or other credit check providers.

The data they get is a large dataset with hundreds of aggregated variables. In the majority of cases, for things like credit card applications, mobile phone contracts and others, the credit card company will not see your actual month by month history for each account.

Instead the data they see is summarised across different products and time frames. So instead of seeing a detailed print out of your payment behaviour for each account, the lender will see variables like "Maximum delinquency Last 3 Months" which means the maximum number of payments behind you were on any account in the last 3 months.

There are hundreds of these variables in the dataset so, the lender can use a combination of different ones to build a better understanding of your profile - the number of accounts you hold, the total outstanding balances, your credit limits, total payments made, etc.

Most key variables are based on fixed time frames which is important to know when trying to understand how long it takes to improve your credit score.

The following are typical examples of the time frames that are used in variables that are used to calculate your credit score:

Time frameExample of a variable
Latest available dataTotal outstanding revolving credit balance
Total amount you owe on credit cards
Last 3 monthsNumber of searches - last 3 months
Number of times your credit bureau data was called for credit applications
Last 6 monthsUtilisation - last 6 months
Average ratio of your credit card balances to credit limits over the last 6 months
Last 12 monthsWorst status - last 12 months
Highest number of payments behind on any credit product in the last year
Last 18 monthsCount of CCJs - last 18 months
Number of County Court Judgements against you in the last 18 months
Last 36 monthsCharge offs - last 36 months
Number of accounts you have had written off for non payment in the last 3 years

There are three important things to note here.

  1. The different variables used are provided for different time periods and the lenders choose which ones they want to use. In the example above, your credit card utilisation will not only be provided for 6 months but also for 1, 3, 12 and in some cases more periods.
  2. There are a number of variables that are not aggregated into a fixed period of time, but instead tell how long it has been since something happened - e.g. Time since over limit (Time in months since you last went over your limit on a credit card).
  3. Not all variables exist for all time frames - for example you won't see a variable in the credit bureau that provides the total number of credit searches in the last 6 years. Searches are only relevant when they are recent so this data would be relatively meaningless. Some variables go all the way from current data to 6 years out - other data types may only have 6 or 12 months' worth available to lenders.

So what does this mean for you?

The key takeaway is that you can definitely make some improvements to your credit score by doing the right things over the next 6 months. Making sure all your payments are on time, you don't go over your credit limit, you don't open new accounts and you pay down the ones you do have or close some will all help a lot.

But if you've recently had trouble with credit, missed a payment or worse, that is likely to stick with you for 12 months or longer. If you've gone bankrupt or had a credit charge off (after months of not making payments), this will affect your credit score for at least 3 years or 6 for prime lenders.

What you can do to improve your credit score faster

If you want to improve your credit card faster, here's the steps you should take as quickly as you are able to do so (the first two are obvious, but hey - we'll include them anyway):

  1. Make sure all your credit payments are on time every single month without fail
  2. Do not go over your credit limit
  3. Repay all your outstanding loans. Close any accounts that do not automatically close themselves.
  4. Repay all outstanding credit card debt. Close any unused credit cards, leave at least one and use it for your daily spend, then repay it in full every month.
  5. Pay down your mortgage and reduce your monthly mortgage payments when it's time to remortgage. Extending your mortgage term will actually improve your credit score as your monthly mortgage payments will reduce. This improves your affordability and lenders do not see the term of your mortgage in most cases.
  6. Do not open new credit accounts, do not apply for new credit products and do not accept any buy now, pay later offers.
  7. Do not go over your overdraft limit or use an unauthorised overdraft - this will be treated the same as going over your limit.
  8. If you are not already on the electoral roll, get yourself on there.

The faster you do all of the above, the faster you will see results.

The one major component that is not up there is your monthly income. This data is now beginning to automatically feed into your credit score through your bank account and increasing the monthly income will improve your affordability when you apply for credit, but increasing it quickly might be easier said than done!

Photo credit: REDPIXEL.PL/